Surplus reaches $84.7 billion in first nine months, already surpassing full-year 2024 record; Alaska LNG pressure adds to Seoul's dilemma

US President Donald Trump gestures on stage during a speech at the Curtis D. Menard Memorial Sports Center in Wasilla, Alaska, on Tuesday (local time). [Reuters]
US President Donald Trump gestures on stage during a speech at the Curtis D. Menard Memorial Sports Center in Wasilla, Alaska, on Tuesday (local time). [Reuters]

South Korea's trade surplus with the United States is all but certain to exceed $100 billion this year for the first time in history, driven by a semiconductor boom — deepening the headaches of trade officials in Seoul.

The milestone comes as US President Donald Trump openly pressures South Korea to invest in Alaska's liquefied natural gas development project, raising the risk that the record surplus could make the country a fresh target for trade retaliation.

The concern is compounded by Japan's trade surplus with the US falling about 23.4 percent in the first half of this year from the same period last year.

South Korea's trade surplus with the US reached $84.7 billion in the first nine months of this year, according to the Ministry of Trade, Industry and Energy. In just three quarters, the figure has already surpassed the previous full-year record of $55.6 billion set in 2024 — by $29.1 billion.

The surplus stood at $17.9 billion when the first Trump administration took office in 2017, then edged down to $13.9 billion in 2018, $11.4 billion in 2019 and $16.6 billion in 2020, before climbing sharply through the Joe Biden years.

It rose to $22.7 billion in 2021 and $28 billion in 2022, then jumped to $44.4 billion in 2023, before hitting a then-record $55.6 billion in 2024.

The figure dipped slightly to $49.5 billion last year after Trump's second term began, but has surged again this year on the back of soaring semiconductor exports fueled by AI demand, making a first-ever breach of the $100 billion mark virtually certain.

The concern is that the widening surplus could hand the Trump administration fresh grounds for trade pressure.

In April last year, the Trump administration signaled its displeasure over South Korea's trade surplus by announcing 25 percent reciprocal tariffs on Korean goods, only to lower them to 15 percent in July after South Korea pledged $350 billion in US investment.

The US also retroactively cut its sector-specific tariffs on automobiles and auto parts from 25 percent to 15 percent, effective Nov. 1 last year.

After more than 10 months of negotiations, the two countries announced a strategic US investment project on Oct. 1.

The announcement spelled out the $200 billion strategic investment component of the $350 billion pledge, excluding the $150 billion earmarked for the shipbuilding sector.

A gas-fired power plant project in Encinal, Texas, was confirmed as the first project, while the two sides reached an agreement in principle to pursue construction of eight large nuclear power plants in the US as the second.

The remaining sticking point is the third project: the Alaska LNG development. The joint fact sheet released by the two sides states only that they agreed to begin a review, but Trump has been repeatedly invoking the project ahead of November's midterm elections, treating South Korean participation as a foregone conclusion.

Seoul must weigh its involvement carefully against the principle of "commercial viability," but outright rejecting Washington's demands is not a realistic option.

A flat refusal could invite tariff retaliation. Earlier this year, Trump explicitly threatened to raise tariffs on South Korean automobiles — a key export — to 25 percent, citing delays in the National Assembly's passage of a special bill on US investment.

Against this backdrop, the ballooning trade surplus is further narrowing the government's room to maneuver in negotiations.

Adding to Seoul's burden is the fact that Japan, which pledged $550 billion in US investment — $200 billion more than South Korea — still saw its trade surplus with the US shrink about 23.4 percent in the first half of this year compared with the same period last year.


oskymoon@heraldcorp.com